Logo design used to be a well-paid, honorable, even memorable profession. But these days, for about the price of a 16GB memory upgrade, you can get a logo designed for your business. Logos have not become a commodity, because they still play an essential role in any branding campaign. But logo design fees have fallen to commodity pricing. This is good news for businesses, as some designers are willing to charge less than $200 for a "winning" logo. Design contests are largely to blame for the collapse.
The logo design business seems more and more like American Idol, but instead of a platinum record deal the winner walks away with a little grocery money. Expectations are high, but budgets have become absurdly low. Web-based logo-design contests, such as Logo Arena and designcontest.com, invite determined designers early in their design careers to compete in open contests with no guarantee for compensation.
Only the winner gets compensated and it's usually in the range of $150. So you might get 50 different concepts from 50 different designers and then choose the one you like. Works very well for small businesses that have minuscule marketing budgets.
Small firms with tiny marketing budgets have nothing to lose but a couple of weeks. But companies who plan to spend a lot on marketing might consider the risk of failure too great.
Major corporations and marketing savvy leaders avoid the bargain bin because a) time is more precious than money and b) millions of dollars ride on the outcome. These companies spend millions of dollars in TV, billboard, web advertising and event marketing. The marketing director doesn’t want to risk being pilloried in the boardroom, where a $50m ad spend is at stake.
In this scenario, it makes sense to pay a New York design firm $25,000 to come up with a name and distinctive identity that’s fresh, memorable, and resonates with the customers. And if the logo designs don’t go over well with the board, the marketing director can always say they used a top-rated established firm (after the agency leaves the room). The new corporate logo will appear on billboards, signage, magazine ads, display ads, and TV advertising would definitely be worth it. And if it sucks, you fire the marketing department and the agency. A lot of people may lose their jobs if the ads with the new logo don’t work.
To take a recent example, look at the flap that happened when Gap Stores tried to relaunch their logo to stave off a steady decline in store revenue. A huge and passionate protest erupted from their tried and true customers. What do you think happened next? Heads rolled. Other creative professions confront the same issue in a different guise. If you just need transportation, why buy a BMW? If you just need a painting on your wall, why buy a Chagall? If you just need an actor, why hire Will Smith?
Steve Jobs paid Paul Rand $100,000 to design the Next computer logo in the early 1990’s. Was it worth it? It was to him, even though a great logo can’t guarantee success. The question is whether he would do it again if both were alive today.